Traditionally Estates have let land to Tenants and Tenants have rented from the Landlord. Tom Selby of Rostons has previously managed Estates where historically holdings and land have been let to Tenants.
“It is becoming more evident that Estate owners are now looking to farm the Estate in hand, the main reason being for TAX purposes.
The Estate referred to as the “farmer” will essentially be in occupation of the land and enter into a Contract Farming Agreement using the services of a “contractor”. The contractor could be the previous Tenant, an adjoining Tenant on the Estate or a local contractor.
In many cases Farm Business Tenancies or land on annual grazing licences will be added to the Contract Farming Agreement as they expire. The Estate in effect the “farmer” claims the Basic Payment Scheme, paying for all variable costs and the contractor will undertake the day to day farming, charging a per acre contractors fee.
Contract Farming Agreements can also be used for individual land owners again for tax purposes or Tenants looking to cut back but reside on the holding”.
“In my opinion due to the tax benefits of Contract Farming I can see these agreements becoming more popular and wildly used”
Tom is aware of various Estates looking to implement contact farming and would recommend “any secure Tenants under an Agricultural Holdings Act Tenancy or those in lengthy Farm Business Tenancies should take professional advice before contemplating surrendering these agreements or entering into a Contract Farming Agreement”
For further information contact the Rostons office on 01829 773000